Originally Published 2020-07-16 11:56:21 Published on Jul 16, 2020
Uneasy contradictions continue in India’s strategic engagements
India has been attempting to find new ways to continue pursuing the middle path<1>in its strategic engagements. On the one hand, there is a greater recognition of the challenge from China and hence, a greater willingness to partner with other like-minded countries. Recent developments in the India-China relationship, particularly confrontation on the Line of Actual Control (LAC) only push India further in this direction. On the other hand, New  Delhi  has  also  been seeking more options to find a middle ground to balance its engagement between China and others. Such efforts have caused a greater emphasis than  before on multilateral groupings such as Russia-India-China (RIC), Brazil-Russia-India-China-South Africa (BRICS) and especially, the Non-Aligned Movement (NAM). Finding the middle ground has  become difficult for a few different reasons. Firstly and most importantly, tensions between India and China have heightened as a result of the current  Sino-Indian clash at the Galwan River valley and the confrontation across much of the Line of Actual Control (LAC)<2> that  divides Indian and Chinese territory and forces. Not only has there been enormous anger about the death of Indian soldiers<3>in the clash, but there also  appears to be a significant change in the attitude of Indian political  elite towards China. Where there was previously some consideration of a pragmatic effort to maintain a stable working relationship with China, its recent aggressive behaviour<4> has made it more apparent<5>that this might not be possible. The second is the effect of the COVID-19 pandemic. While India has not formally blamed China for the world-wide crisis, New Delhi has  become more wary about China and its role in the viral outbreak. Though India has managed to avoid the worst  effects  of the health  emergency by locking  down  the  entire country<6>, the  secondary effects on  the  Indian  economy and society are  likely to be dramatic. The massive migrant crisis is only one  facet  of the enormous dislocation that  Indian  society is going  through, and  the  situation is only likely to become more dire<7>. Consequently, popular Indian distrust of China, even before the  current confrontation at  the  LAC, had  ballooned. New Delhi cannot overlook the consequences of COVID-19 on Indian society and the economy. The third is the international dimension. India has been under some pressure to join others in holding China  and  the  World Health Organisation (WHO) – which  has  been seen as unusually deferential to China – accountable for the crisis. India has  joined the broad coalition of close to 120 nations<8> in carrying out an independent inquiry into the 4  origin  of the  pandemic, a cause that  Australia championed which  in itself  has  caused huge  friction  between Canberra and Beijing<9>. But India is also taking over as the Chair of the WHO Executive Board, which was decided last  year,  well before the  current crisis. This is likely to put India in an uncomfortable position between its partners  such as  the  US and  Australia, who  want  a  credible investigation into the origins of the pandemic, and China, who is likely to seek to stymie such efforts. A related issue is Beijing’s efforts to control and manipulate multilateral agencies such as  the  WHO and  the  United  Nations (UN). It is important for India that  such agencies are not hijacked by any one power. Encouraging and upholding neutrality, accountability and transparency in multilateral agencies could very well become agenda items for India and other like-minded Indo-Pacific powers. Encouraging and upholding neutrality, accountability and transparency in multilateral agencies could very well become agenda items for India and other like-minded Indo-Pacific powers India has also just been elected as a non-permanent member of the UN Security Council, which  will again  complicate India’s ability  to balance its engagement with China  – a permanent member of the  Security Council  – while  also  exemplifying leadership  in upholding these values. Furthermore, the  kind  of COVID-19 pandemic assistance that  China  engaged in with the supply of faulty personal protective equipment (PPE) and test kits<10> has squandered away a lot of sympathy that  may have existed in India. In comparison, despite not being a member of the WHO, Taiwan has  come out as an exemplary partner and its pandemic assistance has  gained a lot of support for Taipei across the  globe.  Beijing’s behaviour has  raised Indian  concerns, adding  to earlier disgruntlement with its behaviour in the Nuclear Suppliers Group<11>. The  fourth is  China’s efforts  to  leverage  the  economic devastation  caused by  the pandemic. In April, the People’s Bank of China (PBoC) raised its stakes<12> in one of India’s largest mortgage providers, the  Housing Development  Finance Corporation (HDFC), from  0.8 percent to 1.01  percent. Worried  at  the  consequences of any  opportunistic corporate takeovers and  acquisitions, the  Indian  government revised its foreign direct investment (FDI) policy that  would  restrict China  from  acquiring significant stakes  in the Indian economy. China  reacted  negatively<13> to  India’s  amended  FDI policy<14>,  which   unambiguously states that  “an entity  of a country, which shares a land  border with India or where the beneficial owner of an  investment into  India is situated in or is a citizen  of any such country, can  invest only under the  Government route.” The policy was  revised within days after China raised its stakes in the  HDFC and was  immediately seen as targeting China<15>, who labelled it as discriminatory. As many countries, including the  US and  Japan, seek to diversity  their markets away from  China,  India is looking  to take advantage of this  emerging situation by providing an alternative market.  However, it is unclear whether India has  created the  necessary infrastructure or  a business-friendly bureaucracy and  political  culture to cash in on this opportunity. As many countries, including the  US and  Japan, seek to diversity  their markets away from  China,  India is looking  to take advantage of this  emerging situation by providing an alternative market.  However, it is unclear whether India has  created the  necessary infrastructure or  a business-friendly bureaucracy and  political  culture to cash in on this opportunity The Indian  government is acutely aware of its lack  of capacity to facilitate countries turning to  India  and  has  asked state governments  to  come up  with  measures that incentivise significant economic and technological investment in the country. But India’s challenges<16> are  far too many including land acquisition, tax and labour laws,  quality of infrastructure, and governance issues that  may not be addressed fast enough to attract anyone trying  to shift  out of China.  In fact,  many  businesses are  finding  Vietnam as a much more attractive alternative than India. All of the above factors increasing tensions in the Sino-Indian relationship have pushed India towards greater engagement with like-minded partners in the  Indo-Pacific. The fact that the Quad  came back<17> in a second iteration  is a testament  to the growing perception of the  challenge that  China poses in the  region. More recently, in the  wake of the pandemic, this cooperation has  extended to a Quad-Plus engagement<18> involving three other Indo-Pacific powers – New  Zealand, South  Korea  and  Vietnam.  There is little doubt that the clash at Galwan will force  India further along  this path. There is a strong case for these like-minded countries to continue working together in the post-pandemic scenario on other issues raised by China’s rise  in the region. Just as the original Quad took shape in the wake  of the 2004 Indian Ocean  tsunami, this group has  the  potential to emerge as  a strategic entity  after the  COVID-19 pandemic is over because each of the new partners has  had to confront aggressive Chinese behaviour. Whether a Quad-plus arrangement becomes a reality or not, there is a strong likelihood that  such minilaterals will take shape in the  Indo-Pacific in a post-COVID world  due to  the  widely  prevalent  apprehension towards China.  But  this  is  not  going  to  be  as straightforward for countries like India which are  still seeking strategic involvement in other regional and multilateral institutions  as a way of buying some bargaining space. India’s Foreign Minister Dr. S Jaishankar in a November 2019 speech said<19> as much:
maximise options and expand space naturally requires  engaging multiple  players…Hedging  is  a  delicate exercise, whether it is the non-alignment and strategic autonomy of earlier periods, or multiple engagements of the future. But there is no getting away from it in a multipolar world.”
India’s then Foreign Secretary Vijay Gokhale referred to this saying that India is no more non-aligned but that  it has  an issue-based alignment<20> approach. India’s recent approach to RIC, BRICS and  the  NAM may  be  a consequence of such thinking. After skipping the  NAM Summits in 2016 and  2019, Modi in 2020 decided to join the virtual  NAM Summit<21>. Whether this  represents a significant shift  in India’s approach towards the  NAM is unclear, but it is more likely that  New Delhi sees this  as one more group which will hopefully provide  at least another layer  of protection – even if a flimsy one – from China’s threats. On the  other hand, given the  initial rationale of the RIC as an anti-US counterbalance, it does not make sense that  India is still as invested in this group. New Delhi’s growing convergence of strategic interests with the US and US allies is a stark contradiction with that  of the RIC agenda, particularly as India-China border tensions increase. However, even  after the  latest clashes, India’s foreign minister attended the  virtual  RIC Foreign Ministers  Meeting<22> held  on 23rd of June. Notwithstanding, the  incongruent  strategic goals<23> between India, Russia and  China are likely to begin  showing up sooner rather than later. The same applies to BRICS, another group in which India and China are partners. As with the NAM, it is likely that India sees membership in these groups as a defensive response to China’s power, as a way of moderating Beijing rather than  one of grand ambition. Nevertheless,  a pertinent question is whether India  can  continue all  of these parallel conversations in a strategically useful manner. In the  aftermath of the  Galwan  clash, India’s choices just became harder.
This essay originally appeared in Perth US Asia Centre


<1> Shivshankar Menon (2020), ‘India’s Foreign Affairs Strategy’, Brookings India, May; Sunil Khilnani et al. (2012), ‘Non-Alignment 2.0: A Foreign and Strategic Policy for India in the Twenty First Century’, Centre for Policy Research, February. <2> Sushant Singh (2020), ‘Line of Actual Control: Where is it located and where India and China differ’, The Indian Express, 18 June. <3> Dinakar Peri, Suhasini Haidar, Ananth Krishnan (2020), ‘Indian Army says 20 soldiers killed in clash with Chinese troops in the Galwan area’, The Hindu, 17 June. <4> Rakesh Sood (2020), ‘Writings on the Chinese wall’, Observer Research Foundation, 20 June. <5> Ananth Krishnan (2020), ‘For minor tactical gains on the ground, China has strategically lost India, says former Indian Ambassador to China’, The Hindu, 21 June. <6> Hugo Seymour (2020), ‘Locking down 1.3 billion people: India’s swift response to COVID-19’, Perth USAsia Centre, 6 April. <7> Jay Ramasubramanyam (2020), ‘India’s treatment of Muslims and migrants puts lives at risk during COVID-19’, The Conversation, 21 May. <8> Daniel Hurst (2020), ‘Australia hails global support for independent coronavirus investigation’, The Guardian, 18 May. <9> Jeffrey Wilson (2020), ‘The Australia-China trade war: Vale the ‘grand bargain’?’, The China Story, 18 May. <10> Teena Thacker & Anandita Singh Mankoita (2020), ‘Tens of thousands of Chines PPE kits fail India safety test’, The Economic Times, 16 April. <11> Economic Times (2019), ‘China rules out India’s entry into NSG without ‘consensus’ on allowing non-NPT countries’, 21 June. <12> The Hindu (2020), ‘People’s Bank of China picks up 1% stake in HDFC’, 12 April. <13> Business Standard (2020), ‘India’s new FDI policy is discriminatory and against tree trade: China’, 20 April. <14> Government of India Ministry of Commerce and Industry (2020), ‘FDI Policy Selection’, 17 April. <15> Harsh Pant & Nandini Sarma (2020), ‘India Cracks Down on Chinese Investment as Mood Turns Against Beijing’, Foreign Policy, 28 April. <16> Bloomberg (2020), ‘India looks to lure more than 1,000 American companies out of China’, The Economic Times, 7 May. <17> Hong Le Thu (20219), ‘New perspectives for the revived Quad’, 14 February, The Strategist. <18> Rajeswari Pillai Rajagopalan (2020), ‘Towards a Quad-Plus Arrangement?’, Perth USAsia Centre. <19> Ministry of Foreign Affairs, Government of India (2019), ‘External Affairs Minister’s speech at the 4th Ramnath Goenka Lecture 2019’, 14 November. <20> Nayanima Basu (2019), ‘India is no longer ‘non-aligned’, says Foreign Secretary Vijay Gokhale’, The Print, 10 January. <21> Shubhajit Roy (2020), ‘PM Modi at NAM summit: terrorism, fake news ‘deadly viruses’, Indian Express, 5 May. <22> The Wire India (2020), ‘At Russia-India-China Meet, India Talks of Need to Respect Legitimate Interests of Partners', 23 June. <23> Rajeswari Pillai Rajagopalan (2020), ‘Growing Russia-India-China Tensions: Splits in the RIC Strategic Triangle?’, The Diplomat, 17 March.
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Rajeswari Pillai Rajagopalan

Rajeswari Pillai Rajagopalan

Dr Rajeswari (Raji) Pillai Rajagopalan is the Director of the Centre for Security, Strategy and Technology (CSST) at the Observer Research Foundation, New Delhi.  Dr ...

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